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A REFUNDING BOND ORDINANCE AUTHORIZING THE ISSUANCE OF $30,100,000.00 AGGREGATE PRINCIPAL AMOUNT OF REFUNDING BONDS AND/OR REFUNDING NOTES BY THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY, FOR THE PURPOSE OF FUNDING AN EMERGENCY TEMPORARY APPROPRIATION TO REPAY A TRANSITIONAL AID LOAN FROM THE DIVISION OF LOCAL GOVERNMENT SERVICES WITHIN THE DEPARTMENT OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY.
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WHEREAS, due to an increase in taxes payable to the County of Essex, New Jersey (the “County”), the City of Newark, in the County of Essex, State of New Jersey (the “City”) faced a serious fiscal emergency for its Fiscal Year 2025 budget and requested Fiscal Year 2025 Transitional Aid to Localities (“Transitional Aid”) administered by the Division of Local Government Services within the Department of Community Affairs of the State of New Jersey (the “Division”); and
WHEREAS, the Division determined to lend the City $30,000,000.00 in Transitional Aid (the “State Loan”) to balance the City’s Fiscal Year 2025 budget pursuant to an Amended Loan Agreement between the Division and the City, dated August 11, 2025 (the “Agreement”); and
WHEREAS, pursuant to the terms of the Agreement, the State Loan is due and payable in full to the Division no later than March 3, 2026; and
WHEREAS, the Municipal Council of the City adopted a resolution providing for a $30,000,000 emergency temporary appropriation (the “Emergency Temporary Appropriation”) pursuant to N.J.S.A. 40A:4-20 to repay the State Loan; and
WHEREAS, the payment of such Emergency Temporary Appropriation is a purpose for which an appropriation may lawfully be made for the period between the beginning of the 2026 fiscal year and the date of the adoption of the 2026 annual budget of the City; and
WHEREAS, the amount of the Emergency Temporary Appropriation will be included under the appropriate heading in the City’s 2026 annual budget as adopted except, to the extent, if any, said Emergency Temporary Appropriation is paid or funded through the authorization of bonds or notes as an appropriation authorized by law pursuant to the Local Bond Law, N.J.S.A. 40A:2-1 et seq. (the “Local Bond Law”); and
WHEREAS, the Emergency Temporary Appropriation was made to meet a pressing need for public expenditure to protect or promote the public health, safety, morals or welfare of the citizens of the City; and
WHEREAS, pursuant to Section 51 of the Local Bond Law, the City has determined to provide for the payment of such Emergency Temporary Appropriation through the issuance of refunding bonds and/or refunding notes in an aggregate principal amount not to exceed $30,100,000.00 (the “Refunding Obligations”), as provided in this refunding bond ordinance; and
WHEREAS, the City now desires to authorize the issuance of not to exceed $30,100,000.00 in Refunding Obligations of the City to fund the Emergency Temporary Appropriation.
NOW, THEREFORE, BE IT ORDAINED AND ENACTED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY THAT:
Section 1. In order to finance the purposes described in Section 2 hereof, negotiable refunding bonds and/or refunding notes of the City are hereby authorized to be issued in an aggregate principal amount not to exceed $30,100,000.00 (collectively, the “Refunding Obligations”). The proceeds of the Refunding Obligations are hereby appropriated to the purposes described in Section 2 hereof.
Section 2. (a) The purpose for which the Refunding Obligations are to be issued are to (i) fund the Emergency Temporary Appropriation, which was adopted for the purpose of repaying a $30,000,000.00 Transitional Aid to Localities loan to the Division of Local Government Services within the Department of Community Affairs of the State of New Jersey, and (ii) pay costs associated with the issuance of the Refunding Obligations, including, but not limited to, printing, advertising, accounting, financial advisory and legal services, rating agency fees, underwriter’s discount, and bond insurance premiums, if any.
(b) The aggregate cost of issuing the Refunding Obligations and all costs associated with the payment of the aforesaid emergency appropriation, as provided by N.J.S.A. 40A:2-51(b), shall not exceed $100,000.00, which amount includes all costs of issuance described in Section 2(a) hereof. Such amount is included in the maximum authorized aggregate principal amount of Refunding Obligations set forth in Section 1 hereof.
Section 3. Any further provisions as to terms of sale, deposit, security, regulation, investment, reinvestment, disposition or application of the proceeds of the Refunding Obligations, and matters in connection therewith, shall be determined by resolution of the Municipal Council of the City adopted prior to the issuance of the Refunding Obligations, except that refunding notes shall be issued in accordance with the provisions of Section 4 and Section 12 of this refunding bond ordinance and no subsequent resolution of the City is required to be adopted to authorize the issuance of refunding notes.
Section 4. The Municipal Council hereby delegates to the Chief Financial Officer of the City the power to sell the Refunding Obligations on a negotiated basis, to determine the terms of the Refunding Obligations and to perform such other actions and make such other determinations, subject to, as applicable, the limitations to be set forth in a subsequent resolution of the City.
Section 5. The Municipal Council of the City hereby authorizes and delegates to the Chief Financial Officer, in consultation with Wilentz, Goldman & Spitzer, P.A., bond counsel to the City (“Bond Counsel”), NW Financial Group, LLC, municipal advisor to the City (the “Municipal Advisor”), and other officials and representatives of the City, the authority to negotiate, approve the terms of, and to execute and deliver on behalf of the City a Bond Purchase Agreement or similar agreement, if necessary, for the purchase and sale of the Refunding Obligations.
Section 6. All other matters relating to the Refunding Obligations shall be performed or determined by subsequent resolution of the City, or the performance or determination thereof shall be delegated by resolution of the City to a financial officer of the City.
Section 7. A certified copy of this refunding bond ordinance, as introduced and adopted upon first reading, shall be filed with the Director of the Division of Local Government Services, in the New Jersey Department of Community Affairs prior to final adoption hereof, together with the statement signed by the Chief Financial Officer of the City required by N.J.S.A. 40A:2-55.
Section 8. The full faith and credit of the City are hereby pledged to the punctual payment of the principal of and the interest on the Refunding Obligations authorized by this refunding bond ordinance. The Refunding Obligations shall be direct, unlimited obligations of the City and, unless paid from other sources, the City shall be obligated to levy ad valorem taxes upon all the taxable property within the City for the payment of the Refunding Obligations and the interest thereon without limitation as to rate or amount.
Section 9. After passage upon first reading of this refunding bond ordinance, the City Clerk is hereby authorized and directed to publish a summary of this refunding bond ordinance, together with the “NOTICE OF PENDING BOND ORDINANCE” (with appropriate completions, insertions and corrections), at least once in a newspaper qualified under N.J.S.A. 40A:2-19, at least seven (7) days prior to the date of the public hearing and further consideration for final passage (which date shall be at least ten (10) days after introduction and first reading). The City Clerk is further directed to comply with all provisions of N.J.S.A. 40A:2-17(b) regarding postings, publications, and the provision of copies of this refunding bond ordinance. The City Clerk is hereby authorized and directed to set the date of the public hearing for this refunding bond ordinance.
Section 10. After final adoption of this refunding bond ordinance by the Municipal Council, and approval by the Mayor, the City Clerk is hereby directed to publish a summary of this refunding bond ordinance, as finally adopted, together with the “NOTICE OF ADOPTION OF BOND ORDINANCE” (with appropriate completions, insertions and corrections), at least once in a newspaper qualified under N.J.S.A. 40A:2-19.
Section 11. The Municipal Council hereby covenants on behalf of the City to take any action necessary, or refrain from taking such action in order, to preserve the tax-exempt status of the Refunding Obligations, if issued on a tax-exempt basis, authorized hereunder as is or may be required under the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “Code”), including compliance with the Code with regard to the use, expenditure, investment, timely reporting and rebate of investment earnings as may be required thereunder.
Section 12. All refunding notes issued hereunder shall mature at such times as may be determined by the Chief Financial Officer of the City, provided that no note shall mature later than one (1) year from its date. The notes shall bear interest at such rate or rates and be in such form as may be determined by the Chief Financial Officer. The Chief Financial Officer of the City shall determine all matters in connection with the notes issued pursuant to this refunding bond ordinance and the signature of the Chief Financial Officer upon the notes shall be conclusive evidence as to all such determinations. All notes issued hereunder may be renewed from time to time in accordance with the provisions of the Local Bond Law. The Chief Financial Officer is hereby authorized to sell part or all of the notes from time to time at a public or private sale and to deliver them to the purchaser thereof upon receipt of payment of the purchase price and accrued interest thereon from their dates to the date of delivery thereof. The Chief Financial Officer is directed to report in writing to the governing body at the meeting next succeeding the date when any sale or delivery of the notes pursuant to this bond ordinance is made. Such report must include the principal amount, the description, the interest rate, and the maturity schedule of the notes so sold, the price obtained and the name of the purchaser.
Section 13. The supplemental debt statement required by the Local Bond Law has been duly made and filed in the Office of the Clerk of the City and a complete executed duplicate thereof has been filed in the Office of the Director of the Division of Local Government Services, New Jersey Department of Community Affairs, and such statement shows the gross debt of the City as defined in the Local Bond Law is increased by the authorization of the Refunding Obligations provided for in this bond ordinance by $30,100,000, but, pursuant to Sections 44(g) and 52 of the Local Bond Law, such amount shall constitute a deduction from gross debt to the extent permitted by law, and the said obligations authorized by this bond ordinance will be within all debt limitations prescribed by said Local Bond Law.
Section 14. This bond ordinance shall take effect twenty (20) days after the first publication hereof after final adoption, as provided in the Local Bond Law, but not prior to the time that the consent of the Local Finance Board in the Division of Local Government Services, New Jersey Department of Community Affairs has been endorsed upon a certified copy of this refunding bond ordinance as finally adopted, as provided by N.J.S.A. 40A:2-55.
Section 15. The Refunding Obligations authorized herein shall be designated as “Qualified Bonds”, pursuant to the Municipal Qualified Bond Act, N.J.S.A. 40A:3-1 et seq. (the “Municipal Qualified Bond Act”), and shall contain a recital that it is issued pursuant to Title 40A of the New Jersey Statutes and is entitled to the benefits of the provisions of the Municipal Qualified Bond Act. The City shall certify to the State Treasurer the name and address of the paying agent, the maturity schedule, the interest rate and the dates of payment of debt service on such Qualified Bonds within ten (10) days after the date of issuance of such Qualified Bonds.
STATEMENT
Ordinance authorizing the issuance of $30,100,000.00 aggregate principal of Refunding Bonds and/or Refunding Notes for the purpose of funding an Emergency Temporary Appropriation to repay a Transitional Aid Loan from the Division of Local Government Services within the Department of Community Affairs of the State of New Jersey.